CySEC Reaches Settlement with FXNet Over CFD Issues

Cyprus Securities and Exchange Commission (CySEC) has announced that a settlement with FXNet Limited is here, a CIF license holder, for possible violations of the Investment Services and Activities and Regulated Markets Law of 2017.

FXNet operates the Retail FX and CFDs brokerage brand EMS Brokers, which maintains its operations in Limassol, Cyprus. The company is led by longtime CEO Kypros Papatheodoulou and serves clients through its platform, emsbrokers.com.

CySEC Reaches Settlement with FXNet Over CFD Issues

So, according to CySEC, the settlement follows an investigation assessing FXNet’s compliance over the period 2021–2022. The review focused on multiple organizational and regulatory requirements under the Law, including authorization conditions, compliance structures, product governance, record keeping, and safeguarding of clients’ funds.

Specifically, CySEC’s findings addressed:

• Organizational requirements under Article 17, including compliance frameworks, product governance, record-keeping practices, and the protection of client funds.
• Client information and conduct obligations under Article 25, ensuring that general principles and disclosure requirements were properly observed.
• Suitability and appropriateness assessments as per Article 26, emphasizing the correct evaluation and reporting to clients regarding financial products.
• Product intervention rules under Article 42 of Regulation (EU) No. 600/2014, particularly in line with CySEC’s Directive DI87-09, which restricts the marketing, distribution, and sale of Contracts for Difference (CFDs) to retail clients.

The settlement, which amounts to €225,000, was available through FXNet. CySEC noted that the agreement reflects the company’s acknowledgment of the findings and commitment to strengthening its compliance measures moving forward.

This development underscores CySEC’s ongoing vigilance over Cyprus-based financial service providers, particularly retail FX and CFD brokers, ensuring that client protection and regulatory adherence remain top priorities within the sector.

FXNet Limited, meanwhile, confirmed its cooperation with the regulator and stated that it remains committed to maintaining high standards of compliance and client service.

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